Navigant Research Blog

Technology and Buildings – A Solid Foundation for Sustainability

— June 6, 2017

The idea of corporate sustainability risks becoming a business paradox—a symbol of commitments without funding or substance that, in themselves, become unsustainable. However, political uncertainty, understanding of climate risk, and shareholder demands are redefining corporate sustainability strategies. Technology innovation has set the groundwork for a transformation of sustainability strategy, and intelligent buildings are a perfect starting point.

#1: Business Response to Political Uncertainty and Climate Risk Awareness

In early May, a full page ad campaign in The New York Times, The Wall Street Journal, and the New York Post made a call to President Donald Trump to commit to the Paris Agreement. The signatories, 24 companies with a market cap of over $3.2 trillion, proclaimed that US leadership on climate change would strengthen the country’s economic competitiveness, create jobs, and reduce business risks. Uncertainty is bad for business, and a unified approach to study, combat, and adapt to climate change is an imperative for the economy.

#2: Shareholder Demands

Ceres convenes institutional investors for climate change education and advocacy. Climate change risk disclosure is a major focus area, and the group tracks shareholder resolutions that demand portfolio resilience analysis. Ceres cites the resolutions filed at 15 major fossil fuel companies as one line of evidence that shareholders demand climate change preparedness and investment in mitigation. Along the same lines as #1, shareholders see uncertainty as bad for their investments, and with more unity, major investors are demanding action and planning on climate change.

Start with Intelligent Buildings

On May 4, I moderated Energy Efficiency in Buildings – Technology Helping to Set New Benchmarks, a webinar for Realcomm. The roundtable discussion and results of real-time polling support the argument that technology can provide measurable improvements on sustainability and tie to climate change commitments.

A question to the audience highlighted the confusing state of branding and opinions around sustainability. The audience was asked, “Would you rather your company be considered ‘green’ or ‘efficient’ by your customer base?” The results were striking: 80% chose “efficient,” while only 20% chose “green.” This result underscores the challenges companies have faced with sustainability initiatives that failed to rely on technology or reflected measurements in time rather than ongoing improvements.

John Seaton, director at RealFoundations, helped illustrate how technology can deliver bottom-line benefits and change the face of sustainability. In two case studies, RealFoundations identified significant energy and associated cost savings with data analytics in 4-star ($20,000 energy savings) and 5-star ($10,000) NABERS Energy (the Australian equivalent to LEED) scored buildings. This evidence sets the stage for how technology can amplify the benefits of sustainability commitments.

There is power in aligning technology and sustainability. An intelligent building is defined by a data infrastructure for ongoing monitoring and operational changes. Once a commercial building has the IT backbone for capturing detailed data on a continuous basis, there is a platform for systemic change that can deliver sustainability benefits while supporting the bottom line. The dataset is the input and the output is a near endless array of business metrics—utility cost savings, equipment maintenance reports, occupant satisfaction, or carbon emissions reductions. The real benefit is that as a tool for sustainability, an intelligent building delivers quantifiable energy, resource, and traditional sustainability metrics. It also delivers business improvements that keep executive decision makers committed and budgets lined up.

 

Inexpensive Offerings Driving Deeper Penetration of Efficiency Technologies

— March 22, 2017

Technological development is evolving quickly in all areas of the energy efficient buildings market. From HVAC systems with advanced controls to building energy management systems (BEMSs) that can drive deep efficiency gains, it is possible for commercial buildings to reduce energy consumption by up to 50% or more in a well-conceived project. Software has become a ubiquitous and necessary piece of almost every building component.

Most connected, intelligent devices of all types were devised to accomplish a defined purpose while gathering volumes of data along the way. But according to IBM Research’s Global Technology Outlook 2015, 90% of the data collected in the 10 years prior to 2015 was abandoned. Additionally, 60% of sensory data collected at the edge of intelligent systems loses its value in milliseconds. Like the parable about the tree falling in a forest, if these advanced digital tools collect data but nobody uses it, does it really add value? It may … eventually.

Early Adopter Phase

A large segment of the overall building stock is still managed using older technologies, with little or no digital data to support efficient operations. Some building owners and operators have the necessary sophistication and resources to proficiently understand and utilize more advanced digital toolsets, while many others do not. It is still the early adopter stage for much of the sophisticated new technologies. This dynamic, however, is feeding other emerging trends on the energy efficient buildings landscape.

So many buildings operate inefficiently that even the most basic forays into gathering data and understanding operational efficiency can lead to significant savings. Many of the initial efficiency activities can also be done at low or no cost by simply understanding operational setpoints and other characteristics. This simple understanding can lead to energy savings from 5% to 25% or more and provide enough information to lead to more significant projects and savings over time. This trend has been identified as a valid business model in its own right, and it serves what has been recognized as a valid market need.

Innovative Business Models

EnergyAI is an example of a company that offers a no touch analysis of a building’s performance at a very low price point—approximately $25 per report. EnergyAI utilizes a company’s utility interval data and produces a comprehensive report on the buildings energy consumption patterns with a simple, itemized list of suggestions for improvement. Gridium is another company with a similar utility data approach, but with more of an ongoing presence in the building. Eco-Energy works with larger clients and annual energy spending (+$10 million) and utilizes a sophisticated software package, but it sells energy savings, not the software itself.

These business models eliminate large upfront expenditures, work within the resource and experience constraints of a typical building, and identify meaningful savings at a lower cost. They are also enabling greater penetration of efficiency initiatives in a larger portion of the global building stock. The energy efficient buildings market continues to evolve.

 

Lighting-Based Indoor Positioning Gains Momentum

— March 22, 2017

Advances in technology are changing the consumer experience. Online shopping and omnichannel retailing are becoming increasingly important for consumers because of easily available product knowledge, price comparisons, coupons, and quick access to products. Another technological advancement changing the consumer experience and shifting the retail market is indoor positioning. In brick-and-mortar retailing, indoor positioning has gained traction in recent years as retailers adapt to the changing retail landscape and align their online and physical store shopping experiences. Lighting companies have taken notice of the changing retail landscape and are staking their claim to retail indoor positioning through visible light communication (VLC) and other indoor positioning technologies, such as Bluetooth Low Energy (BLE). The ability to combine these technologies for enhanced indoor positioning solutions is progressing the retail experience for consumers.

Partnerships and Acquisitions

The most recent partnership to advance light-based indoor positioning was announced by Philips on February 27, 2017. The company announced the creation of its Location Lab partner program, which brings together companies working to develop applications for Philips’ indoor positioning system utilizing VLC for “the power of GPS indoors,” as described by Philips. The new partnerships will enhance and customize indoor positioning across multiple industries, including retail spaces, offices, and malls. Philips’ location-based service partners with Aisle411, Favendo, Adactive, and other international companies. The IT and systems integration partners include SAP, Microsoft, and Capgemini, and the in-store technology partners include SES-imagotag and Zebra. Philips Lighting has also teamed with Blue Jay to improve operational processes.

Another lighting incumbent, Acuity Brands, has recently furthered its indoor positioning offerings. Acuity’s advancement of indoor positioning occurred through internal advancements as well as several acquisitions. In April 2015, Acuity Brands acquired ByteLight—a company developing indoor positioning technology—by combining VLC and BLE. In January 2016, Acuity acquired GeoMetri, which is a software and services platform provider for mapping, navigation, and analytics. These strategic acquisitions enable Acuity and Philips Lighting to be leaders in this space. On March 28, 2017, Acuity will host a webinar in conjunction with Navigant Research on adding value to a shifting retail market through indoor positioning.

Application

In Europe, other retailers are deploying indoor positioning, working with a variety of lighting manufacturers for new systems. Zumtobel has deployed indoor positioning at E.Leclerc, which is a hypermarket in Langon, France. However, unlike Philips, Zumtobel used Bluetooth without VLC for indoor positioning because it prefers Bluetooth over newer VLC technology. OSRAM took a similar approach by using Bluetooth and not VLC for indoor positioning in Switzerland. A fashion retailer purchased the Bluetooth chipsets to install existing lights in 23 stores throughout Switzerland for indoor positioning. While OSRAM does sell luminaires with a built-in Bluetooth transmitter, these were not used for this project. In collaboration with Favendo, Philips has installed the company’s first indoor positioning system in the supermarket EDEKA Paschmann in Dusseldorf, Germany. The system will allow shoppers access to the location-based services, as well as allow employees to more quickly search for items.

Going Forward

While the deployment of indoor positioning systems utilizes the combined technologies of VLC and BLE, these systems are still limited. One of the major barriers to the quick adoption of these solutions is the privacy concerns of consumers. Educating consumers about these technologies and the benefits enabled through indoor positioning will allow for greater adoption by retailers, and it is clear these solutions will be more commonplace in the future. Retailers are already capitalizing on the benefits these solutions provide to customers, employees, and retailers. This trend should continue as more companies realize the potential of lighting-based indoor positioning.

 

The Sensors Are Coming

— March 9, 2017

Data is the key to transforming regular facilities into intelligent buildings. The key to collecting that data is the proliferation of connected sensors. Buildings that gather and analyze information on occupancy, CO2 levels, light levels, humidity, and temperature are able to operate more effectively. As the Internet of Things gains adoption in the broader business world, building sensors are increasingly being connected to the Internet to drive energy efficiency improvements with substantial cost savings. Navigant Research puts the current size of the advanced sensor market at $1.2 billion in 2016 and expects that figure to nearly triple over the next decade.

As data collection has evolved from monitoring building conditions to being able to monitor individual behavior, some of those individuals are beginning to get creeped out. A recent Marketplace article explores some of the sensor technologies gaining adoption in commercial offices and came away wholly uncomfortable at the level of data employers can collect.

Hanlon’s Razor

In all likelihood, these fears are likely irrational and overblown. Gathering, processing, and analyzing data remains a significant challenge in building operations, particularly for existing facilities. Most building owners simply do not have the bandwidth and technological sophistication to use that data for nefarious purposes. It will likely take several years for building technology to evolve to the point where privacy is a rational concern. However, it is an important conversation to have now.

The promise of increased efficiency from better data and concerns about privacy are two sides of the same coin. The information that helps facilities operate well can be used to determine how much time an employee spends at their desk. As technology is developed and adopted, occupants need to be a part of the decision-making process. Building technology providers will ultimately need to ensure both physical comfort and emotional comfort around privacy protections.

 

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